"Encouraging Housing Pension Use After Age 70"... National Pension to Allow Early Receipt Starting from Those Born in 1968

Asset management strategies for the 50-60 age group, who are approaching the timing of receiving the National Pension, are emerging as a key variable in securing retirement living expenses. As those born in 1968 become eligible to receive early old-age pensions this year, strategic choices based on individual health status and income situations are required.

Early Receipt vs. Deferred Receipt: Choices Based on Health and Income

CEO Song Yeong-uk explained the advantages and disadvantages of early receipt and deferred receipt of the National Pension, along with specific figures, in the video. Early receipt allows one to receive the pension up to 5 years earlier than the normal receipt timing, but the pension amount is reduced by 6% per year for each year it is received early. If received 5 years early, one would receive only about 70% of the original amount.

CEO Song cited cases where early receipt is advantageous: when health deteriorates and there is a possibility of death before age 76, when an income gap occurs between retirement and the pension receipt period, and when there is a concern of losing eligibility as a health insurance dependent due to pension income. On the other hand, deferred receipt adds 7.2% to the pension amount for each year of deferral. If deferred by 5 years, the total amount increases by 36%. CEO Song explained that for a recipient receiving 1 million won per month based on age 65, if they defer for 5 years, the annual receipt increases by 6 million won, and the total amount over 30 years of receipt could differ by about 200 million won.

Housing Pension and Securing Liquidity through Downsizing

Considering the Korean retirement asset structure, where the proportion of real estate is high, the Housing Pension can be an important means of creating cash flow. CEO Song mentioned data showing that the proportion of real estate in the assets of those in their 60s reaches 82%, and suggested utilizing the house as a pension, similar to a lifelong salary account.

Looking at the expected receipt amounts based on the officially announced price, for a 400 million won house, one can receive approximately 1.2 million won per month starting from age 70; for 500 million won, 1.5 million won; and for 700 million won, approximately 2.2 million won. CEO Song personally advised that delaying the timing of Housing Pension receipt until after age 70 may be advantageous in terms of the amount received. He also presented a strategy to secure cash by downsizing the house, such as children moving out. He explained that by downsizing a house to secure 100 million won in cash, one can create a monthly cash flow of approximately 540,000 won, and by securing 500 million won, a monthly cash flow of approximately 2.8 million won can be created.

The Key to Retirement Asset Management is 'Execution' and 'Setting'

CEO Song pointed out that while it is easy to neglect retirement preparation during working life, 83% of individuals who apply for personal bankruptcy due to failure in asset management after retirement are aged 50 or older. To prevent this, he emphasized the importance of properly 'setting' asset allocation and product selection in the early stages.

In particular, he recommended creating a structure where income, expenses, and investments are automated so that assets are managed without having to worry about them. He added that in the case of long-term investment, one should build an environment where assets can grow while remaining focused on one's main profession by utilizing easily accessible tools such as ETFs.